By: Nghiinomenwa Erastus
After allocating N$67,9 billion to various ministries, offices, and government agencies early in March this year, they went back to the treasury, asking for an extra N$7,1 billion.
The government treasurer Iipumbu Shiimi has revealed during his FY2021/22 Mid-Year Budget Policy Review.
He said despite more requests for extra funding from various ministries, offices, and agencies (OMAs), Shiimi could only reallocate and N$2,2 billion after he has reviewed.
“Total of N$2,2 billion has been made available for reallocation across the budget votes. This is against total funding requests of N$7,1 billion received from Offices, Ministries and Agencies during the review,” Shiimi revealed.
The FY2021/22 Mid-year Budget Review exercise focused on reallocating the realized resource envelope across critical expenditure items that could not be postponed to future financial years.
According to the treasure, he had withdrawn some funds from the Development Budget, reducing it on a net basis by N$279,8 million from N$5,5 billion to N$5,2 billion.
The money was directed to the operational budget, which is mostly used for current consumption and interest payment, instead of the development budget used for investment spending.
While N$41.4 million was realized from suspensions on the Operational Budget.
These internal savings were obtained through a Treasury and National Planning Commission review considering execution rate by half-year, stage of the procurement process, coupled with projected expenditure outturn by the end of the financial year.
The revenue estimates for the year have also been adjusted upwards to the tune of N$1.5 billion, reflecting primarily N$408.6 million raised from fish quota auctions, N$400 million from additional dividends declared by NPTH, N$693.8 million due to underestimation of individual income taxes and some N$304 million from other mineral royalties, among others.
The non-interest Operational Budget is increased by N$2.2 billion from N$53.9 billion to N$56.1 billion, and statutory expenditure is reduced marginally from N$8.5 billion in the main budget to N$8.3 billion,
The reallocation of resources proposed above lifts the global expenditure ceiling for FY2021/22 from N$67.9 billion to N$69.7 billion. The proposed reallocations are primarily to address underbudgeting on personnel expenditure, utilities, and other spending items across Budget Votes and to meet resource shortfalls at Health and Social Services due to the third wave of COVID-19.
The ideal situation would have been to utilize the additional revenue to reduce the budget deficit. However, we are faced with projected shortfalls on personnel and other obligatory expenditure items, which would otherwise result in overshoots and outstanding invoices. The treasury is undertaking an exercise to improve the affected votes’ budget accuracy to avert that outcome in the coming years.
The preliminary revenue outturn by September 2021 stood at N$27.2 billion, equivalent to 52 per cent of the budgeted revenue and about 4 per cent better than the average historical mid-year collection rate.
The execution rate on total expenditure and commitments (excluding statutory spending) stood at N$32.2 billion at mid-year, equivalent to some 49.0 per cent of the budget. Meanwhile, the half-year statutory expenditure execution stood at 43.8 per cent, while the development budget implementation rate, including expenditure commitments by the end of September 2021, stood at 39 per cent.
The debt stock reflects that the mid-year point has effectively met 57 per cent of the budgeted financing requirements.
the Ministry of Public Enterprises is allocated a total of N$220.4 million to support the operations of public enterprises, including the leasing of locomotives by TransNamib, settlement of debt for AgriBusDev and operational support for Namibia Wildlife Resorts, among others.
The Ministry of Defence and Veteran Affairs is allocated N$477.1 million, consisting of N$458 million to meet the funding shortfall on personnel expenditure and N$19.1 million for veterans expenditure.
The Ministry of Finance will be allocated an additional N$230 million, consisting of N$200 million for PSEMAS funding shortfalls because of increased claims due to the third wave of COVID-19 and N$30 million for subscription fees.
Shiimi said the government isolated 1,209 students who applied for study loans whose parents earn above the N$500,000 threshold. he said these could have cost the Fund around N$43 million per annum.
The minister said the Cabinet approved the Students Financial Assistance and Debt Recovery Policy, which the Fund is promptly implementing.
“As upstanding citizens, I implore all previous NSFAF beneficiaries to support and cooperate with the Fund to repay outstanding debts and ensure financial sustainability going forward,” Shiimi said.
He also said the focus would be on accelerating economic recovery, diversification, and job creation.